Private entrepreneurs to construct 20 new cement plants, Iraq

28 November 2005

The government has issued licenses for the construction by private entrepreneurs of 20 new cement plants, according to the minister of industry and minerals. The minister, Osama al-Najafi, said the plants, which will cost $4bn will be built across the country.

“This is an unprecedented step. The factories will be fully in Iraqi hands and built by Iraqi investors,” Najafi said. He said the construction of these plants, to be completed in two years, will add 25 million tons to Iraq’s annual cement output.

Iraq currently has 18 cement plants with a total installed capacity of over 20Mta. However, several of these plants are idle either due to outdated equipment or security reasons.

The installed capacity of active plants is about 10Mt. But Najafi said even these factories were in trouble and maximum they could produce was in the range of 3.5Mta. He estimated Iraq’s needs at 30Mta.

Prior to UN trade sanctions imposed for its 1990 invasion of Kuwait, Iraq actually produced around 10Mt of which a small portion was exported. But due to UN trade sanctions and a decline in demand, production plummeted in the 1990s with only a dozen plants operating.

Some plants were looted after the 2003 US invasion and currently only a few plants are reported to be operational. Unlike other countries in the Middle East, Iraq has significant limestone reserves, making it a competitive and low cost producer of cement.